Questions To Ask A Lender Before Buying A Home in the Twin Cities

If you are investigating homes for sale in the Twin Cities, here are several questions that you should be asking.

“What Do I Need to Show?”

A good mortgage lawyer will explain everything required when asked. Some programs require more information than others but here is an overview of what you should have available.

• ID.
• Proof of income.
• Financial accounts.
• Property statements, if applicable.

“Which Loans Are Ideal For Me?”

Different loans apply to different borrowers and a smart loan officer will hear you out before selling them to you. Let the lender know about your finances and have the loan officer break down what your options are and how well they might help.

“Do You Do In-House Approval?”

There are many lenders in the world but their capabilities can vary. The loan officer you work with determines if you get the loan, regardless of others’ involvement. Companies who approve in-house are better equipped to handle hurdles with your mortgage while out-of-house underwriters may ignore your loan request and move on.

“How Much Down Payment Before I Can Get My Loan?”

20% may be standard but is not a requirement. Some lenders will work as long as you put up 3%. You might also want to consider an FHA or VA loan, though these have their own red tape. Whatever situation you are presented with, know that you should understand all your obligations if you agree to the loan.

If you have 20% or more to put down, it might be best to do so if only to dodge private mortgage insurance (PMI).

“How About Special Financing Programs?

The US has more than 2,500 different financing programs to encourage buying homes. While only a handful of them might apply to your situation, every one of them can help. A proper lender will know what is involved in leading you to various helpful programs; if your mortgage officer seems overly focused on closing the deal, you should look elsewhere.

“Do You Charge Origination Fees?”

This fee is an expense lenders charge for just establishing a loan and not all lenders have them. Lenders who do charge them require, it means that you need to weigh that expense against other lenders’ fees. Furthermore, it is not out of the question to negotiate the fee.

“What Other Fees Do You Charge?”

Lender fees are inevitable, how else would they stay in business? Remember to compare lender fees from different providers and measure them when combined with other factors. You should definitely ask how soon the lender can compile a loan estimate.

A Good Faith Estimate was intended to encourage investigating the market before deciding on a lender and to educate people on what services to bargain with for the best results. Now called a “loan estimate,” this document itemized all of the various costs involved in gaining a mortgage and a proper lender should be able to provide one within three days of finishing your application.